Euro Area EUR

Euro Area Government Budget to GDP

Info

History

Chart

Impact:

Medium

Source: EUROSTAT

Latest Release:

Date:

Surprise:

0.1%

EUR

Actual:

-3.1%

Forecast: -3.2%

Previous/Revision:

-3.5%

Period: 2024

What Does It Measure?

The Euro Area Government Budget to GDP ratio measures the relationship between a country's government budget balance (surplus or deficit) and its Gross Domestic Product (GDP), explicitly assessing fiscal health and sustainability. This indicator focuses on government spending and revenue generation, key areas that reflect public finance management.

Frequency

The Euro Area Government Budget to GDP report is released annually, typically providing final figures based on comprehensive fiscal data collected from member states.

Why Do Traders Care?

Traders and investors monitor this indicator closely as it provides insights into the fiscal stability of the Euro Area, influencing perceptions of creditworthiness and economic performance. A higher government deficit relative to GDP can lead to concerns over inflation and interest rates, affecting asset prices, including currencies like the euro, bonds, and equity markets.

What Is It Derived From?

This indicator is derived from national accounts and general government finance statistics reported by Eurostat, typically incorporating data from both the central government and local authorities. The calculation involves a comprehensive review of government expenditures, revenues, and GDP figures to determine the budgetary balance relative to the overall size of the economy.

Description

The government budget to GDP ratio illustrates the fiscal position of the Euro Area, indicating whether the region is operating with a budget surplus or deficit relative to its economic output. Economic analysts view this ratio as a vital measure of fiscal sustainability, as persistent deficits can lead to increased public debt levels, potentially destabilizing the economy over time.

Additional Notes

As a coincident economic measure, the government budget to GDP ratio is essential for understanding current fiscal policy effectiveness and economic conditions in the Euro Area. Additionally, this indicator is often compared with similar measures in other regions, allowing analysts to gauge relative fiscal health globally.

Bullish or Bearish for Currency and Stocks

Higher than expected: Bearish for Euro, Bearish for Stocks. Lower than expected: Bullish for Euro, Bullish for Stocks. A dovish tone: Signaling lower interest rates or economic support is usually good for the Euro but bad for Stocks due to cheaper borrowing costs.

Legend

High Potential Impact
This event has a strong potential to move markets significantly. If the 'Actual' value differs enough from the forecast or if the 'Previous' value is significantly revised, it signals new information that markets may rapidly adjust to.

Medium Potential Impact
This event may cause moderate market movement, especially if the 'Actual' deviates from the forecast or there's a notable revision to the 'Previous' value.

Low Potential Impact
This event is unlikely to affect market pricing unless there's an unexpected surprise or a major revision to prior data.

Surprise - Currency May Strengthen
Actual deviated from Forecast on a medium or high impact event and historically could strengthen the currency.

Surprise - Currency May Weaken
Actual deviated from Forcast on a medium or high impact event and historically could weaken the currency.

Big Surprise - Currency More Likely To Strengthen
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely strengthen the currency.

Big Surprise - Currency More Likely To Weaken
'Actual' deviated from 'Forecast' more than 75% of historical deviations on a medium or high impact event and may likely weaken the currency

Green Number	Better than forecast for the currency (or previous revise better)
Red Number	Worse than forecast for the currency (or previous revise better)
Hawkish	Supports higher interest rates to fight inflation, strengthening the currency but weighing on stocks.
Dovish	Favors lower rates to boost growth, weakening the currency but lifting stocks.

Date	Actual	Forecast	Previous	Surprise
Apr 22, 2025	-3.1%	-3.2%	-3.5%	0.1%
Apr 22, 2024	-3.6%	-3.2%	-3.7%	-0.4%
Apr 21, 2023	-3.6%	-3.5%	-5.3%	-0.1%
Apr 22, 2022	-5.1%	-7.1%	-7.1%	2%
Apr 22, 2021	-7.2%	-8.6%	-0.6%	1.4%
Apr 22, 2020	-0.6%	-0.8%	-0.5%	0.2%
Apr 23, 2019	-0.5%	-0.8%	-1%	0.3%
Apr 23, 2018	-0.9%		-1.5%